Hitachi Cable News vol.367
70th semiannual business report From April 1, 2006 to September 30, 2006

Message from the President

The economic environment in this interim consolidated fiscal period can be summarized by stating that Japan experienced an economic boom while the US and the East Asia regions-China in particular-also experienced steady economic growth, despite soaring crude-oil and other international commodity prices. In this economic environment, the Hitachi Cable Group has aggressively expanded business in a number of growing fields, while at the same time implementing significant structural reforms.

As a result, the Hitachi Cable Group achieved increases both in sales and profits in this interim consolidated fiscal period relative to the same period last year. Net sales were 251,759 million yen (a 32% increase compared to the same period last year), ordinary income was 9,663 million yen (a 2.8-fold increase compared to the same period last year), and interim net income stood at 4,483 million yen (a 4.2-fold increase over the figure for the same period last year).

On October 1, 2006, Hitachi Cable marked its 50th anniversary since being spun off from Hitachi, Ltd. We appreciate your support during our half-century of history.

We have positioned this 50th anniversary year, 2006, as the "Year of Our Second Foundation," as we take the first steps to increase profits further and to develop and expand our business. To this end, we have formulated our Plan "BEGIN", a new medium-term management plan, which was launched in April 2006. We are now in the process of implementing aggressive structural reforms and investment in strategic areas based on this plan. At the same time, we are also reinforcing our research and development framework, enhancing our technical capabilities in manufacturing, and promoting personnel training programs.

Further, in order to continue to pursue our basic philosophy and the original technologies that we have cultivated since establishment-and at the same time, to develop these according to the changes of the times-we have established a corporate vision we refer to as "Empowering Energy & Communication," in addition to a code of conduct to realize this vision. Based on this basic philosophy and the corresponding policies, our entire company will continue to pursue "communication" technology as we adeptly respond to the changing needs of the times. We fully intend to continue our contributions to society through our unique products and services, and all of us at the Hitachi Cable Group are grateful for your continued support in these efforts.

December 2006

President and Chief Executive Officer,
Norio Sato